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Pay no attention to the insurer behind that diplomatic curtain p2

Wed Feb 11th, 2015 on     Insurance Law,    

We were talking in our last post about insurance and traveling and the hassle of dealing with insurance claims for things that happen away from home. Most of us are familiar with the hassle that comes from going out-of-network with a health care claim. Put a few hundred miles between you and your in-network providers, and things get even more complicated.

We were also talking about the federal government’s decision to allow travel and trade with Cuba — a decision that will certainly affect Florida, particularly Miami, in a number of ways. The media, however, has only hinted at the full reach of this policy change. Even the insurance industry is affected.

As you can imagine, Cuba was out of even out-of-network coverage for U.S. insurance writers until January. It makes sense, when you think about it. First, as a matter of public policy, insurance doesn’t cover illegal activities, and traveling to Cuba was specifically prohibited by the federal government. Second, to process a claim, an insurer would have to do business with Cuban providers, which the federal government also prohibited.

Now, however, insurers have the federal government’s permission to sell and to service policies for U.S. citizens traveling from any country to Cuba. The change applies to health, life and travel insurance and presumably takes effect immediately.

Establishing relationships with providers and financial institutions in Cuba, however, could take some time. Insurance companies will have to develop new products and new systems, and they will have to adapt to new regulatory schemes before they can sell anything.

The delay poses a couple of risks to consumers. First, these first waves of travelers may well be uninsured or underinsured for anything to do with Cuba. They need to check their policies to determine the level of risk they are taking on with each trip.

Second, transitional times like this present special opportunities for scammers. They may claim that the insurance they are hawking covers travel to Cuba when it does not. They may sell policies for insurance companies that do not exist. They may jack up the prices on legitimate insurance products.

Anyone considering such a purchase may do well to do some research before writing that premium check. And anyone with questions about coverage or a problem with a claim should consider consulting with an attorney.

Source: Carrier Management, “U.S. Rules on Cuba Ease Travel, Trade, Insurance Restrictions,” Krista Hughes and Anna Yukhananov, Jan. 15, 2015

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